Greater Risk in Electric Vehicle Dependence
On Tuesday, the S&P Global Ratings threw cold water on talking points frequently cited by Speaker Ron Mariano and Senate President Karen Spilka as their reasons for not suspending the state gas tax. State House leaders tried to scare lawmakers during debate on the gas tax suspension that if Massachusetts were to temporarily suspend the gas tax, the state’s bond rating would be thrown into chaos. On Tuesday, S&P unequivocally stated the opposite. They declared that, "temporary state gas tax suspensions, implemented recently by a few U.S. states, and under discussion by others, are unlikely to lead to rating changes on highway user tax-supported debt." In fact, they warned of the dependence on electric vehicles to state bond ratings. S&P said, "A greater risk is the potential long-term threat of reduced gas consumption from electric vehicles." These remarks are in stark contrast to State House leaders who pronounced the opposite.
“Speaker Ron Mariano and Senate President Karen Spilka seemed so concerned with the bond rating when considering a tax suspension, but they don’t have the same concern when raising taxes or borrowing more money for current spending. It’s a good thing that their fears are not based on reality, so State House leaders can now freely consider suspending the state gas tax when debating the annual budget. As more states adopt a gas tax suspension, it would be foolish for our State House leaders to continue to fearmonger. At this point, there is nothing preventing Speaker Mariano and President Spilka from adopting a gas tax suspension,” stated Paul Diego Craney, spokesperson for Massachusetts Fiscal Alliance.
“It’s worth stressing that the agency did warn against states becoming overly reliant on electric vehicles, as this shift will have a negative impact on the state credit rating. We look forward to hearing from Speaker Mariano and President Spilka on how they plan to use tax dollars collected from the sale of electric vehicles in order to avoid any precarious situations from the bond agencies,” concluded Craney.